For more MarketBeat and other streaming markets coverage from The Wall Street Journal, point your mobile browser to wsj.com/marketspulse.

The Breakfast Briefing

Headline roulette was back in full swing yesterday, and will likely continue through the final two trading days of the year.

After being down as much as 151 points, the Dow surged back into positive territory during the final trading hour before finishing slightly lower. The mere whiff of a potential fiscal-cliff deal – stoked by word that House Republicans will reconvene on Sunday evening – prompted the late-day comeback.

While stock investors tend to be a bullish bunch, the fact remains that Washington’s time to address the looming tax increases and spending cuts is fading fast.

“The equity market rallied and Treasurys declined on the headline, but despite the return to Washington, lawmakers appear to be no closer to forging an agreement than in recent days,” Dan Greenhaus, chief global strategist at BTIG, said in an email.

Before the news leaked that House Republicans will reconvene, Senate Majority Leader Harry Reid earlier in the day warned that the economy is likely headed over the cliff. His warning prompted the stock market’s initial tumble.

Jostling by both sides is expected to carry on, with the focus now shifting to Sunday when House Republicans are expected to engage in frenzied last-minute negotiations.

Until then, financial markets remain stuck in an erratic holding pattern, whipping around on the latest headlines out of Washington but going nowhere fast. While the S&P 500 is riding a four-day losing streak, it is down less than 2% during the streak. And the index is clinging to a 0.14% gain for December.

“Hardly a market screaming bloody murder,” Mr. Greenhaus says.

At 1418.10, the S&P 500 is up 13% this year.

“If the S&P 500 holds 1400 through the end of the year as we wait for a cliff resolution, I’ll be pleased that it ended up being a pretty good year,” Jim Dunigan, managing executive of investments at PNC Wealth Management, told MarketBeat.

Such headline roulette occurred on a more frequent basis earlier this year when Europe’s debt crisis was roiling markets. It also took place during the summer of 2011 when the debt-ceiling debacle caused historic daily volatility.

Yesterday’s action was a reminder of what used to transpire on a more regular basis.

The market isn’t there now, not by a long shot. But hey, who knows what lies at the bottom of the cliff.

Morning MarketBeat Daily Factoid: On this day, Nichelle Nichols, the actress who played Lieutenant Uhura in Star Trek, turns 80 years old.

“Woe betide the stock pickers. While fund managers haven’t exactly gone the way of the dinosaur, it is getting harder for them to justify their existence. If present trends hold, 2013 may bring little relief.”

“When a 5-foot surge from superstorm Sandy washed over 200 acres of low-lying parking lots at New Jersey’s Port Newark, a fleet of vehicles belonging to International Motor Freight Inc. was damaged. Now, the company is in a legal fight with its insurer over compensation for the damage. The case is among the first of what are likely to be thousands of Sandy-related insurance disputes that will wind up in court.”

“Unusual explicitness from Japan’s new leaders has helped convince the market they are serious about weakening the yen to revive the nation’s embattled exporters, but such moves threaten to complicate Tokyo’s relations with the U.S. and other major trading partners.”

“How to play the great reflation? Faced with a sluggish recovery, the Federal Reserve is buying yet more bonds and targeting lower unemployment; the Bank of Japan is under political pressure to be more radical; and the governor-designate of the Bank of England has floated the idea of a looser monetary policy target. The result could be a race to the bottom for currencies—but not everyone can be a winner.”

Add a Comment

Thanks for reading MarketBeat. We would like to direct you to MoneyBeat, the Wall Street Journal’s brand new global blog. MoneyBeat unites MarketBeat, The Source, Overheard and all the Deal Journal blogs, bringing together all the market, M&A, IPO and hedge-fund news from those blogs into a 24-hour hub for finance news. Check it out and let us know what you think at moneyblog@wsj.com.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.